Can My Real Estate Broker Sue Me If I Reject an Offer on My House?
Many South Florida homeowners use real estate brokers when selling their property. This typically involves the homeowner signing a listing agreement with the broker. This agreement authorizes the broker to legally represent the seller. It will also spell out any terms or conditions the parties agreed to, such as the broker’s commission rate if and when a sale closes.
Appeals Court: Seller’s “Instructions” Not Part of Listing Agreement
As with any written contract, you need to carefully review and understand the terms of a listing agreement before you sign. If there are specific terms you wish to include, it must be in the written, signed agreement. Do not assume that you will be able to informally amend or revise the agreement later.
A recent decision from the Florida Third District Court of Appeal, Carmona Realty Group, LLC v. Fernandez, presents a cautionary tale on this point. The defendant in this case listed her home for sale with the plaintiff, a real estate broker. The listing agreement listed the home’s sales price at $499,500 and authorized a brokerage commission of 5 percent of the final purchase price.
As relevant here, the agreement further provided that if the defendant refused or failed to sign an offer matching the price and terms specified, she would still be liable for paying the plaintiff’s commission.
After signing the listing agreement, the defendant then unilaterally signed a list of “instructions” informing the plaintiff of “additional requirements” she had for any offers on the house. The plaintiff did not sign these instructions. Nor did the listing agreement mention or reference such a document.
To make a long story shirt, the plaintiff eventually presented the defendant with seven offers on her house that matched the terms of the listing agreement. The defendant rejected, or refused to respond to, all of them. The plaintiff subsequently sued for breach of contract, seeking its lost commission. The lawsuit alleged the plaintiff had been holding out for an unspecified higher price for the house.
A trial court ruled in favor of the defendant, holding that the additional “instructions” she provided constituted part of the listing agreement. And since none of the offers strictly complied with those instructions, the judge reasoned, the plaintiff was not entitled to their commission. On appeal, however, the Third District reversed and held the plaintiff was entitled to their fee.
Essentially, the Third District said the defendant’s instructions were not part of the listing agreement. For one thing, since the plaintiff never signed the instructions, the plaintiff could not seek to enforce its terms under Florida’s Statute of Frauds. Nor was it proper to incorporate or merge the instructions into the listing agreement, as neither document referenced the other.
Ultimately, the Third District said this was a case where the defendant signed a listing agreement “without reading the contract” and fully understanding her obligations to her broker.
Contact a Davie Real Estate Lawyer
If you are involved in any kind of dispute over a real estate contract, it is essential that you seek out qualified legal representation. Our Davie real estate litigation lawyers can advise and represent you in such matters. Contact Valero Law today at 305-607-7011 to schedule a free consultation. We serve clients in Davie, Broward County, Coconut Grove and Miami-Dade County.
Source:
scholar.google.com/scholar_case?case=3445576397236848106
